Daily Archives: March 5, 2018

Housing Society Waste Management

Housing Society Waste Management

Housing Society Waste Management

Office bearers of large housing societies may now face prosecution for not treating their wet waste. The Maharashtra Pollution Control Board (MPCB) will be lodging cases against such defaulters. This will be followed by asking local bodies to cut water supply to the society by 20 per cent.

“We have taken a policy decision that office bearers of large housing societies that have not installed organic waste composters (OWCs) or are not treating wet waste will be prosecuted,” a senior MPCB official.

“We are insisting that housing societies with a built up area of over 2 lakh square feet, which require environment clearances, must segregate and treat wet waste by converting it into compost,” he added, stating that they were conducting a survey of such premises.

The official added that later, local bodies such as the BMC, would be issued instructions to initially reduce the quantum of water supply by 20 per cent. Notices have also been issued to housing societies in Mumbai and Pune.

Another MPCB official said that based on a list provided by the BMC, they had sent notices to around 80 large housing societies in Mumbai for not establishing facilities to treat wet waste. “Many of these bulk generators have given undertakings about establishing OWCs,” he added.

“We can take action against office bearers against the relevant sections of the Solid Waste Management (SWM) rules, 2016, for non-compliance. The quantum of the penalty on these waste generators will be decided by the court,” the official explained.

Building projects of an over 20,000 sqm area are given environmental clearances with a condition that all solid waste should be processed in the premises.

BMC officials admit that though the state had issued guidelines under which premises over 5,000 square meters are to treat their own wet waste for the occupation certificate to be issued, it was found that these spaces were being used for purposes such as parking.

Under the SWM rules, all gated communities and institutions with an over 5,000 square meters area shall segregate waste and source and process, treat and dispose off bio-degradable waste through composting or biomethanation within the premises as much as possible.

It defines bulk generators as buildings occupied by the Central and State government or local body departments or undertakings, public sector undertakings, private companies, hospitals, educational institutions, hotels, commercial establishments, markets, places of worship, stadiums and sports complexes with an average daily waste generation rate exceeding 100 kg.

The Mulund, Deonar and Kanjurmarg dumping grounds see around 7,300 metric tons of garbage being dumped there daily. Processing of wet garbage at source will reduce the waste being dumped there.

WASTE MANAGEMENT 

Under SWM rules, all gated communities with an over 5,000 sqm area shall segregate waste, treat and dispose off bio-degradable waste through composting or biomethanation within the premises

Source: DNA, 25-Feb-2018

GST on Housing Society

GST Impact on Housing Society or RWA

GST Impact on Housing Societies or RWA

Co-operative Housing Societies are entities registered under the co-operative laws of the respective States.

According to Section 2(16) of the Maharashtra Co-operative Society Act, 1960, “housing society” means a society, the object of which is to provide its members with open plots for housing, dwelling houses or flats; or if open plots, the dwelling houses or flats are already acquired, to provide its members common amenities and services.

Simply put these are a collective body of persons, who stay in a residential society. As a collective body, they would be supplying certain services to its members, be it collecting statutory dues from its members and remitting to statutory authorities, maintenance of the building, security etc.

Co-operative Housing Societies – whether amenable to levy of GST

Co-operative Housing Societies

A Society is akin to a club, which is composed of its members. So, can a service provided by a Housing Society to its members be treated as service provided by one person to another. The answer is yes. The following extracts of the GST law will make the position clear.

As per Section 9 of CGST Act, 2017, levy of GST is on supply of goods and services. As per Section 7 expression “supply” includes––

(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;

The definition of “person” in Section 2(84) (i) of the CGST Act, 2017 specifically includes a co-operative society registered under any law relating to co-operative societies. Thus a registered co-operative society is a person within the meaning of the term in the CGST Act.

The next question which arises is whether the activity of the society can be said to be in the course or furtherance of business. The definition of business as per section 2(17) of the CGST Act, 2017 is as under

“business” includes––

(a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit;

(b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a);

(c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction;

(d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business;

(e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members;

(f) admission, for a consideration, of persons to any premises;

(g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation;

(h) services provided by a race club by way of totalisator or a licence to book maker in such club ; and

(i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities.

Thus, as per section 2(17)(e) of the CGST Act, 2017provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members is deemed to be a business. The activities of the housing society would thus attract the levy of GST and the housing society would be required to register and comply with the GST Law.

Compliance requirements for housing societies under GST

If the turnover of housing society is above 20 lakhs, it needs to take registration under GST in terms of Section 22 of the CGST Act, 2017. However, taking registration does not mean that the housing society has to compulsorily charge GST in the monthly maintenance bills raised on its members. Notification No.12/2017 -Central Tax (Rate) dated 28.06.2017 at sr.no.77 provides for the following exemption to housing societies:

Service by an unincorporated body or a non- profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution –

(a) as a trade union;

(b) for the provision of carrying out any activity which is exempt from the levy of Goods and service Tax; or

(c) up to an amount of five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex

In view of the provision contained at (c) above, a society may be registered under GST, however if the monthly contribution received from members is less than Rs.5, 000/-(and the amount is for the purpose of sourcing of goods and services from a third person for the common use of its members), no GST is to be charged by the housing society on the monthly bill raised by the society. However, GST would be applicable if the monthly contribution exceeds Rs. 5, 000/-.

Certain statutory dues such as property tax, electricity charges etc. form part of the monthly maintenance bill raised by the society on its members. The question would arise whether such charges should be included while computing the monthly limit of Rs.5000/- in terms of clause (c) of sr.no.77 of notification 12/2017 -Central Tax (Rate) dated 28.06.2017. As per clause (b) of the above exemption, exemption is available to housing societies for provision of carrying out any activity which is exempt from the levy of Goods and Services Tax assuming that a housing society is a non-profit registered entity; and property tax and electricity is exempt from the levy of GST. Thus, charges, collected by the society on account of property tax, electricity charges and other statutory levies would be excluded while calculating the limit of Rs.5,000/-.

Further, the question would then arise that if the monthly bill is say Rs. 6,000/- (and the same is on account of services for common use of its members), will GST be applicable on Rs. 6,000/- or Rs.1, 000/-. In such cases, exemption is available up to an amount of Rs.5, 000/ and GST would be applicable on the amount in excess of Rs.5, 000/-

Source: Tax Guru (Link)